City loses revenue, but embraces sweepstakes ban

Leaders not worried about losing $200,000 a year from Internet gambling operators

By Mark SchulmanTimes-News Staff Writer

Published: Saturday, December 29, 2012 at 4:30 a.m.

Last Modified: Friday, December 28, 2012 at 10:32 p.m.

The city of Hendersonville will lose about $200,000 in annual revenue as a result of a state Supreme Court ruling upholding a ban on Internet sweepstakes, but city officials say the ban's benefits outweigh the costs.

Eighteen businesses within the city limits have permits for Internet sweepstakes games and will have to shut down those operations by Jan. 3, according to city officials.

Revenues from the sweepstakes were never included in the city budget, and council members are pleased that the gambling operations will close, Interim City Manager Lee Galloway said.

Sweepstakes computers started showing up in 2007 after video poker machines became illegal. Patrons who play Internet sweepstakes buy Internet or phone time to win cash and prizes on a computer.

In 2010, the North Carolina Supreme Court ruled that sweepstakes was a form of gambling and as result, banned the machines, according to the Associated Press.

The city of Hendersonville charged $2,600 for permits for the first five computers at a business participating in the practice and $500 for each additional computer.

City council does not want the gambling machines in the community, Galloway said.

"The city of Hendersonville was pleased when the decision was made in 2010 to declare them illegal," he said.

Sweepstakes machines are a social issue in the community, he added.

"They (sweepstakes machines) take money from people that they may not be able to afford to play," Galloway said. "They could use that money for other things than for playing Internet sweepstakes."

Galloway stressed that the money the city generated from sweepstakes computer permits was not part of the budget, and the city council would rather not have them in the area.

"They (city council) were not anxious to have the revenue," Galloway said. "They are not losing sleep that the businesses will be gone."

<p>The city of Hendersonville will lose about $200,000 in annual revenue as a result of a state Supreme Court ruling upholding a ban on Internet sweepstakes, but city officials say the ban's benefits outweigh the costs.</p><p>Eighteen businesses within the city limits have permits for Internet sweepstakes games and will have to shut down those operations by Jan. 3, according to city officials. </p><p>Revenues from the sweepstakes were never included in the city budget, and council members are pleased that the gambling operations will close, Interim City Manager Lee Galloway said.</p><p>Sweepstakes computers started showing up in 2007 after video poker machines became illegal. Patrons who play Internet sweepstakes buy Internet or phone time to win cash and prizes on a computer. </p><p>In 2010, the North Carolina Supreme Court ruled that sweepstakes was a form of gambling and as result, banned the machines, according to the Associated Press.</p><p>The city of Hendersonville charged $2,600 for permits for the first five computers at a business participating in the practice and $500 for each additional computer.</p><p>City council does not want the gambling machines in the community, Galloway said.</p><p>"The city of Hendersonville was pleased when the decision was made in 2010 to declare them illegal," he said.</p><p>Sweepstakes machines are a social issue in the community, he added.</p><p>"They (sweepstakes machines) take money from people that they may not be able to afford to play," Galloway said. "They could use that money for other things than for playing Internet sweepstakes."</p><p>Galloway stressed that the money the city generated from sweepstakes computer permits was not part of the budget, and the city council would rather not have them in the area.</p><p>"They (city council) were not anxious to have the revenue," Galloway said. "They are not losing sleep that the businesses will be gone."</p>